Understanding MLS Data Sharing VS Consolidation

13 Oct Understanding MLS Data Sharing VS Consolidation

Recently, there has been much discussion regarding the future of the MLS. In an environment where the consumer has access to a greater breadth of information than any Broker or agent is afforded through their local MLS, the time has come for change. That need for change is hotly debated. There are some in California who advocate MLS consolidation, some data sharing between MLSs, and a much smaller contingent that advocates no change at all. It is abundantly clear to anyone who has watched CRMLS over the last 6 years as to where we stand. There are organizations, most specifically in San Diego county, that are openly pushing for data sharing. San Diego Association of REALTORS subsequently published an article called Why Data Share Trumps MLS Consolidation, which advocates for MLSs to share their listing data with one another. But not all is at it seems!

Through this article, we are delighted to learn that SDAR shares the same goal as CRMLS of providing open access to data between MLSs. Many facets of their article fall directly in line with the key principles behind our” It’s My Business” campaign. For example, the piece published by SDAR acknowledges that, “Agents and brokers want more data outside of their market,” and, “Brokers don’t want to join multiple MLSs.” We applaud the SDAR leadership for embracing, in such a public manner, the benefits of MLS data sharing. The comments coming from San Diego are exactly what Brokers are telling us at CRMLS. As we travel up and down the state, these sentiments are constantly and directly expressed by working Brokers and agents, and are related in the testimony of industry leadership in our recent video. It seems that everyone in the brokerage community agrees and echoes the same demand for more access to more data between California MLSs.

As pleased as we are to hear of SDAR’s recent change of heart regarding data share, CRMLS does not support the notion that data share is superior to consolidation. Data access is not just a California issue. Throughout the country, and at virtually every nationwide MLS industry event, the call for more MLS consolidation rings loud. The Council of Multiple Listing Services, the national trade association for the MLS industry, held their annual conference last month with more than 700 attendees participating in three days of meetings and discussions. The topic of MLS consolidation dominated the agenda. From the Legal Seminar panels detailing what needs to be in the consolidation agreements to featured speaker Rob Hahn’s riveting presentation of Setting Your Destiny, MLS Consolidation was the most covered topic of the event, with every speaker advocating for more consolidations.

The issue of MLS consolidation almost always stirs up a heated debate that ignites the passions of the participants. Anytime the idea of changing the status quo comes up, especially when those changes include increasing the efficiencies of a system, individuals will get their guard up. Why? Because in this context increasing efficiencies necessarily means fewer individuals involved in the decision making around delivery of MLS services. Consolidation can result in some employees losing their jobs, and will include a decrease in MLS directors and association representatives. None of these individuals likes the idea of losing their current level of influence and power. These are normal human reactions. When you hear arguments against consolidation that contain only broad, conclusory statements with no evidence, you know people are protecting their turf, rather than evaluating in the interest of good policy.

But are those human reactions really a sufficient reason to deny Brokers and agents the well-documented benefits of consolidation? The arguments against consolidation have not changed in over a decade. They remain the same ones CRMLS and SoCal MLS dealt with five years ago when those two large MLS’ merged to form the largest MLS in the country. But now we have the great benefit of actual history to support the benefits of consolidation. We no longer need to have these heated discussions in a vacuum of innuendos and “what ifs”.

The objections that actual experiences have finally laid to rest include:

1. Losing “Local Control” of the MLS – especially from the perspective of smaller associations. This challenge is overcome by providing a good advisory committee structure for the MLS. CRMLS has an Operations, Rules, Association Executives and Finance Committee. Each member association gets to appoint an individual of the associations choosing to each of the committees. While losing their voice was certainly a concern to each of our smaller associations before joining, it is now those same small associations that are the loudest advocates of the benefits of consolidation. History has shown that consolidation has given them a larger voice in the MLS community. Some of the best ideas for MLS innovation and improvement have come from representatives of our smaller associations. By their inclusion in such a large MLS, those same ideas have now been catapulted to the national stage via CRMLS’ participation with RESO, CMLS, and NAR committees. These little associations, with their dominant “local control” would have never had their voices heard on the national stage without consolidation.

2. Brokers losing control of their data. Consolidation does not alter the fundamental principal of the ownership of data. The broker has the same ownership rights to their data in a large MLS that they have in a small MLS. The miss-use of data, and disrespect of the listing broker’s rights also occurs in small MLS’, arguably more than in the larger Regional MLS structure. Have you ever tried to get your own listing data out of a tiny MLS? How easy is it to get a VOW feed or a back office feed from a small MLS.The idea that CRMLS monetizes the data for some huge profit is simply not true. CRMLS is an Opt-In organization. That means while we provide the technological infrastructure for listing data to be sent to web portals like Zillow, the data is syndicated to Zillow only after the Broker goes to their dashboard and turns the Zillow switch to “On”. A large MLS has the technology to provide brokers full control over their listing data, while providing all the varying syndication options may prove a significant challenge for a smaller MLS.

3. Data sharing is “good enough”. While much can be said on this subject, it is important to note that actual observations of existing data shares speak volumes over simple rhetoric. One can look at the decision of Ventura County Regional Data Share (VCRDS) to terminate their data share with CRMLS as but one simple example. VCRDS cited in their press release that an “unexpected” $25,000 cost to reformat its data to connect to a new CRMLS server was the reason for pulling out of the data share. (Over $300,000,000 of real estate value transacted between VCRDS and CRMLS agents in the previous year). Updating servers and staying current with changing technology standards are normal aspects of operating an MLS. Each of these ordinary and regular occurring events can become a large burden when dealing with numerous data shares. There are many additional challenges caused by data shares. For a comprehensive list of data share challenges, read the article “Data Sharing – Viable, But Not an Easy Answer”, written by Matt Cohen and Gregg Larson of Clareity.

While CRMLS and SDAR stand united in regard to the benefits of data sharing between MLSs, there remains a difference in opinion related to the benefits of consolidation. At this important time in the MLS industry it is critical for us to work together, and to take actions in those areas to which we all agree, such as the implementation of more data shares throughout the state. At the same time, we can continue to debate and to gather and present evidence to one another about the benefits and challenges of MLS consolidation.

But we cannot allow ourselves to become paralyzed due to differences in philosophy and opinion about consolidation. We will continue to advocate and articulate the substantial benefits of MLS consolidation throughout the state, while at the same time encouraging every MLS to participate with CRMLS in data sharing.

Though CRMLS supports the position that MLS consolidation is the most perfect answer to our industry’s needs, we all recognize that data shares are a great step forward. And as we now make decisions that will shape the future of our industry, CRMLS is committed to ensuring “perfect” does not become the enemy of “great”.